Tuesday, January 30, 2007

Europe Digs In

WASHINGTON: European governments are resisting Bush administration demands that they curtail support for exports to Iran and that they block transactions and freeze assets of some Iranian companies, officials on both sides say. The resistance threatens to open a new rift between Europe and the United States over Iran.

This should come as no surprise to Americans, for a couple of reasons.

1. Europe is highly dependent on Iranian oil. Whether or not a given country is directly purchasing oil from them, is irrelevant. If Europe takes such bold measures, their economy can and will suffer when Iran turns off the European oil spigot, which they most certainly will do. Supply shortages tend to jack up prices even higher, when demand stays the same.

2. Europe wants to drive the train and avoid creating any perception that the U.S. is driving anything. This is nothing new.

Administration officials say that a new American drive to reduce exports to Iran and cut off its financial transactions is designed to further isolate Iran commercially amid the first signs that global pressure has hurt Iran's oil production and its economy. There are also reports of rising political unrest in Iran.

Beyond all the usual analyses and opinions that will likely be advanced, this part is worthy of further examination. Most middle east experts have stated that Iran's economy is in shambles right now, which has resulted in political unrest

As a result of this, I think Europe is taking a calculated risk here. They are placed in a pretty tough predicament and seem to be taking the path of least resistance, although it stands to yield the least results. In short, Europe is playing for the short-term. And when you consider what they have to lose, it's easy to see why.

Europe is sitting high with its Euro poised and ready to become the premier currency, while surpassing the dollar. The beating out the U.S. part makes it even sweeter, because since WWII, Europe has felt like an overlooked step-child, craving respect and attention. What they do not want at this stage of the game is, watching it fall down. It is their perception that if Iran is crossed and oil supplies become tight, their economies could suffer greatly. In short, it's fear.

But the question that Europe needs to consider is, what are the risks of doing nothing?

The obvious risk is Iranian development of a nuclear weapon and its use. But that's been hashed out and re-hashed, without much of a realization that this is not in Europeans' best interests. It's seems that it is more important that they stay on top of the U.S., because we are the "pariah of the world". And we cannot have that, can we?

But the more obscure risk lies in keeping the current Iranian government empowered, by doing nothing at all.

Here's the thing, Iran is in trouble right now, economically and politically. There is a whole generation that does not remember the Shah, and the revolution. The same sense of restlessness exists, as did in the time of the overthrow of the Shah, except for one thing. Now, the oppressive establishment is the mullahocracy and their unstable hand-picked President. Now, they are the target of Iranian unrest. And it's to the point that it's not a matter of if anymore, but when, the mullahs are overthrown and replaced by a more western friendly regime.

Once this happens, Europe will be in the same position that the U.S. was in, almost 30 years ago, when the Iranians parted ways with America. The question then becomes, will Iran's new government look back and see how the Europeans favored the laissez-faire approach to dealing with an oppressive and violence-supporting regime? If so, will they seek retribution by cutting off their oil, then? Iranians were livid that America supported a corrupt regime, it only stands to reason that Europe could very well pay a hefty price, in the future.

Of course this is just my speculation. They could have a bomb built, well before all this takes place. And they very well might have used it before this scenario would have a chance, to play out. In which case, this whole idea would be rendered a moot point and Europe would have made the smartest move and lived for the moment. But, I would contend that it's hard to enjoy being right, when there is radiation permeating the air.

6 comments:

Greg
said...

Is it fear or is it more of this old game of sticking a finger in the eye of the Americans? We'll never know, and in the end it doesn't matter.

The fact is, Iran needs the West more than the West needs Iran. As you say, a lot of people in Iran's young society today only know the Revolution, which ain't pretty. But even those who remember the shah remember it as the "good old days." Iranians are more alienated from their gov't than ever.

And Iranians can't eat their oil. They need someone to buy it. Maybe the Chinese will buy it.

So we need sanctions that get progressively more harsh as the Iranians become less compliant. It will work, I am convinced. And it would help avoid military conflict.

In the end, I think it's safe to say what the Europeans ARE NOT afraid of, and that's the Iranians having the bomb. They will have the bomb within a couple of years, and the Euros either don't think they will use it, or don't care that Israel will be destroyed.

Either way, I'm not particularly impressed with the European effort here. They were going to teach the "international pariah" how to do things more responsibly and effectively. Remember? So far, so bad!

Great article on how to reduce our dependence on authoritarian, oil-exporting regimes.

http://www.aei.org/publications/pubID.23838,filter.all/pub_detail.asp

One solution: an oil importing cartel.

Also, it turns out that Iran imports a lot of its food. Guess where they import from? Germany is their biggest supplier. Also in the top ten (in order) are China, Italy France and Russia. Iranians do eat, don't they?

The question then becomes, will Iran's new government look back and see how the Europeans favored the laissez-faire approach to dealing with an oppressive and violence-supporting regime? If so, will they seek retribution by cutting off their oil, then? Iranians were livid that America supported a corrupt regime, it only stands to reason that Europe could very well pay a hefty price, in the future.

Pay-the-piper time, huh?

Of course, if Iran detonates one or more nuclear weapons, the world order will change in a way which we cannot fully comprehend. I don't like thinking about waking up one morning to find that change a reality. I hope that Western leaders are giving the matter the serious thought it merits.

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